S&P May Face Federal Charges : Planet Money : NPR
1. The government is considering filing charges against Standard &Poor’s based on its rating of a mortgage-backed bond issued in 2007.
The bond (a CDO) was structured at the request of a hedge fund called Magnetar, according to the FT. Magnetar profited by betting against the housing market.
We teamed up with ProPublica last year to profile Magnetar on This American Life. (You may remember the show tune “Bet Against the American Dream.”)
ProPublica has more on the potential charges against S&P. Here’s a statement from the company.
2. The SEC may ban certain deals
civil money penalties, disgorgement of fees and other appropriate equitable relief.
McGraw-Hill Receives Wells Notice From SEC Regarding S&P Rating of Delphinus CDO
NEW YORK, Sept. 26, 2011 /PRNewswire via COMTEX/ — The McGraw-Hill Companies, Inc. (NYSE: MHP), today filed a Form 8-K with the U.S. Securities and Exchange Commission (the “Commission”) acknowledging that on September 22, 2011, it received a “Wells Notice” from the Commission Staff stating that the Staff is considering recommending that the Commission institute a civil injunctive action against Standard & Poor’s Ratings Services (“S&P”), alleging violations of federal securities laws with respect to S&P’s ratings for a particular 2007 offering of collateralized debt obligations, known as “Delphinus CDO 2007-1.” In connection with the contemplated action, the Staff may recommend that the Commission seek